Outsourcing decision processes: A case study of a Malaysian firm

Abstract

There is a growth trend towards the outsourcing of accounting activities. The drivers of outsourcing
emanate from organisational initiatives, improvement focus, financial and cost objectives or growth
objectives. Despite the increasing practical significance of this phenomenon, the academic literature is
limited to a handfull of studies concerned with the delegation of accounting functions. There are
different drives and phases in the process of outsourcing but little is known on what drives accounting
outsourcing and its process. Based on an in-depth case study, this paper seeks to understand the
drivers and processes in accounting outsourcing. This study examines the mechanisms and practices
adopted in accounting outsourcing in a Malaysian company. Interviews were conducted with vendor
and client of the company studied. The findings reveal that there is no firm basis used by the company
studied for evaluating its outsourcing decision.